Residential property service company, LSL, revealed that average rents increased in September to £698 per month, following eight consecutive months of rises.

David Brown, commercial director of LSL, said: “Landlords have seen tenant demand continue to hit new heights. The mortgage market remains tight and many buyers simply cannot get the finance to get a foot on the property ladder.”

He added: “As a result, demand for rental accommodation is increasing, and supply is not rising enough to match it. This has turned the buy-to-let market into a landlord’s market, and many renters face increasing rental costs while they delay their house purchase.”

The rise in average UK rents has been driven by a strong performance from London and the South East in 2010.

In September, London rents hit their highest on record with landlords increasing their rents by 1.1% to £972 per month. They have risen by 6.8% since January. Rents in the South East rose by 0.9% in September.

Sponsored

Brown added: “There is an acute lack of affordable housing in London, and would-be buyers cannot meet higher house prices – or get big enough mortgages.

“With rental properties so sought after in the city, landlords have been able to continually hike rents since January. In the last twelve months, the average London landlord would have made an annual total return of nearly £34,000 on a typical rental property,” he said.